The Australian Small Business Blog

Tuesday, January 20, 2015

Why I offshored myself to the Philippines

by Derek Stewart

“Offshoring” is a loaded word and controversial topic. To some it means corporate greed gone rampant, lost jobs, destroyed industries, wider economic and societal problems. To others it means embracing a globalised economy, uniquely benefitting developing nations by giving them a real chance to rise out of poverty, redistributing the wealth of the world and lower priced goods and services, for a win-win situation.

There is the often told story of someone losing their job because it was offshored or outsourced, but there’s the less publicised story of the new jobs created by offshoring. Every story has two sides, the rise of technology and automation has caused the loss of many jobs and ended long standing industries ever since the Industrial Revolution. However, it has also created jobs that never existed before, in researching, developing, implementing and improving that same technology and automation, creating industries that never existed until recently like mobile app development or SEO specialists.

This is why when I hear about jobs being lost in Australia to offshoring hubs such as the Philippines, I also look to the jobs that are being created by this change, and how this will affect Australian employees over the next 5-10 years. I see it as a reflection of the dynamic world we live in, where the only constant is change, and the shifts in the skills required in the marketplace are evolving in front of our eyes, faster than ever before. It also highlights to me the importance of being adaptable and forward looking, you can’t predict every change, you can only make yourself flexible and agile, knowing the changes will inevitably come, and handling them as they do.

I landed a job in Manila, Philippines with an Australian company helping Australian SMEs set up their back offices in the Philippines. Prior to arriving I had no idea how large an industry this was, with nearly 1,000,000 Filipinos working for foreign companies. The growth is only continuing, with most of the industry made up of American and European companies, Australia still has not reached the same penetration. Being in the industry and on the ground floor where it is all happening is mind blowing. There's a feeling in the air that a tipping point and boom for Australian firms offshoring is imminently approaching.

People unfamiliar with the offshoring, insourcing, outsourcing, BPO industries are shocked when they visit Manila and find the huge talent pool of skilled, university graduates with excellent English speaking and technical skills, for 20% of the cost of Australian staff. That’s not even starting with the savings on office space, fitouts, super, payroll tax, compliance and support services compared between the two countries. They see how developed the CBDs are in Manila, the Grade-A office facilities and infrastructure. Stereotypes of sweatshops and cheap labour being low quality labour are evaporated when they see the work output generated, as well as the dramatically lower cost of living in the Philippines.

This knowledge can be a scary thought for people in Australia. This means in the future a lot of companies will not hire entry level workers for routine tasks in Australia, or hire all their staff in Australia simply because their clients or CEO is in Australia. Regardless of company size, people are looking globally to see where it makes the most sense to hire staff. Where is the best place to have your sales staff? What about your developers? What about your accounting department? What about your customer service? The answer is likely not all in the same country, even for SMEs. If you could access staff at 20% of Australian wages, what possibilities for new services, improved turnaround time, 24/7 operations and support staff could also be possible for Australian businesses?

As an optimist, I see the potential for Australians who embrace the change and adapt. I see future high school classes and University degrees not focusing on rote learning tedious details and tasks. Instead they could focus on managing international teams, cross-cultural differences, nurturing a global perspective and self-directed learning. There will be a trend for creating business models that could not have previously existed without the technology infrastructure, cheap transport and globalisation there to support it. International travel, international work experience, change management and innovation will be highly valued, not status quo thinking, resistance to change and punching the clock on routine tasks.

Some people make their living through online businesses, lifestyle businesses and blogs, working out of coffee shops on their laptop as they travel the world. Some people have dozens of overseas oDESK contractors they manage from home and never meet in person. Technology allows them to scale their operations with demand and create a level of service delivery previously inaccessible to small businesses, entrepreneurs and start ups. Others realise they can even set up their own offices in a country like the Philippines, and have a team there that complements what they do in Australia, focusing their Australian team on their core business, rather than the support services.

By offshoring myself, getting used to the cultural differences and problems when setting myself up in the Philippines, it has uniquely paralleled my work, in guiding Australian businesses through the process of setting up in the Philippines, the challenges, advantages and disadvantages. Packing my life up, relocating and learning as I go has shown me how the skillsets of future employees is going to be very different to what we were taught in school, and how our attitudes and teachings need to change to teach the skills that will be valuable. Ongoing self-education and the ability to adapt to new work environments, industries and ways of doing business will be the ultimate investment in your career and long term employability, looking to the future and not the past.

Derek Stewart is an Aussie expat helping Australian and New Zealand SMEs set up their back offices in Philippines. Visit

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